South Africa’s largest mobile network operator, Vodacom, recently cut the price of its 1GB 30-day bundle by another R15, to R85. This is over-and-above the 40% price reduction implemented in 2020, which came off the back of a damning inquiry into data prices by the Competition Commission in December 2019.
BrandsEye CEO, Nic Ray, questions whether this latest price cut will be enough to finally sway consumers’ perceptions of value for Vodacom. “While Vodacom’s initial price reduction – implemented in April last year – coincided with a 7% decrease in pricing complaints, it was short lived as complaint rates returned to pre-price-reduction levels in December 2020. It will be interesting to see whether this pricing complaints pattern is repeated in 2021.”
Ray is referring to the results of BrandsEye’s latest South African Telecommunications Sentiment Index, which analysed consumer social media conversations directed at the country’s major telecommunication providers.
Pricing complaints were at their highest over the first quarter of 2020, largely the result of the Competition Commission’s inquiry into data prices and subsequent negotiations with network providers. The Commission’s findings fuelled consumer discontent with data prices in South Africa.
Over the second quarter, both MTN and Vodacom implemented significant price cuts on data, coinciding with a steep drop in pricing complaints, which remained stable across the third quarter of 2020. Pricing complaints, however, picked up again over the last quarter of the year.
Some customers felt Vodacom’s data price cuts were insufficient
Despite reducing data prices by up to 40% following the Competition Commission’s inquiry into data prices in SA, Vodacom saw the worst Net Sentiment in pricing conversation for 2020.
Vodacom saw the highest prevalence of affordability complaints in the industry. Following their price cuts last year, some consumers felt that at R99 for 1GB, the provider’s data prices were still unaffordable.
“While our data shows that Vodacom’s 2020 price cuts ultimately proved unsuccessful in changing consumers’ perceptions of value for money, perhaps this latest reduction will do the trick,” says Ray. “BrandsEye will be keeping a close eye on the effect this has on Net Sentiment in pricing conversation going forward,” he concludes.